PC BASED MRP II SOFTWARE SELECTION FOR THE SMALL … · Material requirements planning is a...

PC-BASED MRP II SOFTWARE SELECTION FOR THE

SMALL HI-TECH MANUFACTURING FIRM

by

Anita M. Johnson, C.P.M., CPIM

A Research Paper

Submitted in Partial Fulfillment of theRequirements for the

Master of Science Degree inTraining and Development

Approved for Completion of 4 Semester CreditsTRHRD-735 Field Problem in Training and Development

______________________________________________________Research Advisor

The Graduate CollegeUniversity of Wisconsin–Stout

May 2000

iii

ABSTRACT

Johnson Anita M.Writer (Last Name) (First Name) (Initial)

PC-BASED MRP II SOFTWARE SELECTION FOR THE SMALL HI-TECH(Title)

MANUFACTURING FIRM

Training and Development Joseph A. Benkowski May 2000 75(Graduate Major) (Research Advisor) (Month/Year) (No. of Pages)

APA(Name of Style Manual Used in this Study)

This research details those steps that are involved with choosing the appropriate

MRP II software for a small hi-tech manufacturer located in the upper midwestern

portion of Wisconsin. The literature reviews and defines the objectives of material

requirements planning. It reveals why materials requirements planning is a key element

of the strategic business plan. It states why small companies choose to hire a consultant to

narrow down the selection of software available to a manageable field of potential

software selections; and why the final selection should always be done by a team of users

within the company.

The challenges associated with software selection in a small company are

numerous, including overcoming internal fear of change and how to solicit the employees

“buy-in.” MRP II software is a considerable expense to any company. The transition of

current policies and procedures, the implementation time, and the training are all

iv

important elements of the cost and these elements are discussed in determining the

appropriate software for a company.

A search for existing surveys and ratings on PC-based MRP II software packages

was completed. These surveys and ratings were the instruments used to narrow down the

preliminary software packages to seven. Suppliers of the seven packages were contacted

and received a questionnaire regarding costs, implementation times, training and follow-

up support. The response to these questions provided the information necessary to narrow

down the field to five packages.

A “needs analysis” was done by creating a process chart of the manufacturing

resource planning flow to indicate which departments should have representatives on the

project team for software selection. The team members constructed a list of functions the

software needs to perform and created a survey of qualitative questions using the quality

tool training method called nominal group technique. The survey questions were asked of

professionals within other organizations using the top software packages to help identify

potential problem areas. These are negotiated in the request for quote phase of the

project. This final step of the project results in the three software packages that the

researcher will recommend.

The research benefits any small manufacturing company considering the purchase

of MRP II software. It details why the selection is important, who should be involved,

and what steps are necessary to do a good job. Choosing and implementing new MRP II

software is a costly venture and a company needs to make the right decision. What a

company does not know could cost them a great deal of money. This paper serves as a

guide to the appropriate steps in MRP II software selection.

v

TABLE OF CONTENTS

Page

LIST OF FIGURES x

ACKNOWLEDGEMENTS xi

Chapter I INTRODUCTION 1

Purpose 1

Scope of Research 1

MRP – An Element of the Strategic Business Plan 1

An Overview of PC-Based MRP II Software Selection 2

The Various Roles Involved with Software Selection 3

Narrowing Down The Selection and Making a FinalChoice

4

Methodology 5

Reliability and Validity 7

Limitations 7

Protection of Human Subjects 7

Chapter II LITERATURE REVIEW 8

Introduction 8

The Implementation of a Manufacturing Resource PlanningSystem is an Element of the Strategic Business Plan

11

The Objectives of MRP Defined 12

How MRP and MRP II Relate to Each Other 12

The Definition of Class A, Class B, and Class C

MRP II Users

13

vi

The Benefits of MRP Applications 13

Doing a Thorough Job in Selecting your MRP IISoftware is Critical

15

An Overview of PC-Based MRP II Software Selection 16

PC-Based MRP II Software 16

Challenges in MRP Software Selection for the SmallCompany

17

Resource Allocation 17

Overcoming the Fear of Change and “Buy-In” 18

Creating an Environment of Respect withSoftware Suppliers

19

The Various Roles Involved with Software Selection 20

Management’s Role in the Selection Process 20

The Role of the “Users” 21

Narrowing Down the Selection to Three or Less Choices 22

Identifying Software Packages for Consideration 22

Steps Toward the Final Selection 23

Request for Quotation 23

Statement of Confidentiality 23

Creating an Introduction 23

Creating Department/Function Overviews 23

Stating the Reason for Change 23

Stating the Key Issues 24

Designating the Field and File Sizes 24

vii

Stating Decision Criteria and Exhibiting aMilestone Chart

24

Stating the Terms and Conditions 24

Supplier Software Demonstration 24

Visits to Other Manufacturers Using the SoftwarePackages

25

Ranking the Suppliers 25

Making the Final Selection 26

Conclusion 26

Definitions 27

Chapter III RESEARCH METHODOLOGY 28

Research Opportunity 28

Research Design 28

Nature of Study 28

Sources of Data 29

Data Collection Procedures 29

Reliability and Validity 30

Limitations 31

Ethical Considerations 32

Chapter IV FINDINGS OF ANALYSIS OF RESULTS 33

The Needs Assessment 33

Computer Training Services Analysis 34

Questionnaire Results 36

Costs 36

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Availability Of Help And Education 37

Implementation and Administration of Software 37

Cooperation 38

Benchmarking Software Package Capabilities 38

Summary of Demonstration Results 38

ROI Systems 39

Made2Manage 39

Lilly Software 40

Syspro 41

Fourth Shift 41

Results of Survey 43

Recommendation of Three MRP II Software Packages 45

Choice #1 Lilly Software Associates – Visual 45

Choice #2 Syspro Group – Impact/Encore 45

Choice #3 ROI Systems – Manage 2000 45

Chapter V RECOMMENDATIONS AND CONCLUSION 47

Costs of a Manufacturing Resource Planning softwareacquisition

47

Demonstration of Software 48

Final Words of Advice 49

References 50

Appendix A Non Applications Order Process Flow 53

Appendix B Applications Order Process Flow 56

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Appendix C Supplier Questionnaire 59

Appendix D Supplier Questionnaire Responses 61

Appendix E Software Demonstration Punchlist 66

Appendix F Software Demonstration Punchlist Responses 69

Appendix G Companies Who Participated in the Qualitative CharacteristicSurvey

74

x

LIST OF FIGURES

Figure Page

2.1 MRP II Model 9

2.2 ERP Model 10

4.1 CTS Rating Example 35

4.2 Top Seven Selected MRP II Software Candidates 36

4.3 Measurement Criteria and Survey Results 44

xi

Acknowledgements

This paper is dedicated to my late husband Len Stewart for his encouragement

and support. I also respectfully acknowledge and am very grateful to Dr. Joseph

Benkowski for being my advisor and program director.

Chapter I

Introduction

This research paper is entitled, “PC Based MRP II Software Selection for the

Small Hi-Tech Manufacturing Firm.” The paper represents an opportunity because it

provides guidelines and benefits in establishing a methodology for MRP II software

selection, which will lower the acquisition and implementation costs for a company. The

scope of this paper is a small manufacturing firm in the upper midwestern part of

Wisconsin. The company is a high technology manufacturer of electronic equipment with

eighteen employees. Their annual sales are approximately 2.5 million dollars and their

manufacturing planning processes have been created to facilitate an engineer-to-order and

mixed mode environment. They do little master scheduling and materials are generally

purchased to the order. This company will remain anonymous throughout this paper and

is referred to as Company XYZ.

Purpose

The purpose of this study is to identify efficient, cost effective MRP II software

for Company XYZ, a small high technology electronics manufacturing firm in

midwestern Wisconsin. The final product will be a recommendation of three software

packages and a list of users for networking and benchmarking purposes.

Scope of Research

MRP – An Element of the Strategic Business Plan

Material requirements planning is a process. MRP II (manufacturing resource

planning) is a method for the effective planning of all resources of a manufacturing

company. The software packages for MRP II include finances, sales, manufacturing

2

planning and control, including MRP, capacity planning, shop floor control, procurement,

engineering, quality management, and cost accounting. Manufacturing resource planning

is a direct outgrowth and extension of closed-loop MRP. The benefits of implementing

the software and utilizing it effectively are numerous: reduced inventory investment,

administrative costs, reduced scrap and improved customer relations.

Implementing a new MRP II software package is very expensive and time-

consuming. Companies on average change their manufacturing software every seven to

ten years. Twenty-five to fifty percent of new implementations end in failure and

seventy-five percent of implementations are considered poor. To implement a MRP II

system successfully, there must be commitment by all levels of management. Top

management must be involved at the conceptual level. A project team and leader must be

selected and a methodology for selection devised.

An Overview of PC based MRP II Software Selection

MRP II software programs when first developed needed the capacity of a

mainframe and minicomputers to run, essentially eliminating the small companies from

being able to afford the software tool. Since the 1980s, trends and storage capacity for PC

applications have grown dramatically. Today, software for MRP implementations using

the PC are full-fledged, powerful programs, which almost any small manufacturing

company can afford. You can get MRP II software programs for the PC for as low as

$695, but these will offer little support.

There are many challenges in MRP II software selection for the small company.

Resource allocation is one of these. Small companies have found that hiring a consultant

is one solution to solving this issue. The consultant has to work closely with the project

3

team identifying the critical business needs and incorporating details of the daily

operation into the software analysis. A consultant can help you “think outside the box”

and eliminate some of the shortcomings of the past.

The fear of change can be stronger and more difficult to overcome in small

organizations. It is important for the consultant to convince the users of the new software

that implementing the program successfully will enhance his or her job performance.

Managers must budget for training. Studies have identified management support as one

of the essential factors affecting system success.

It will be important to create an environment of respect with software suppliers.

When suppliers look at small companies, they see a prospective sale that will range

anywhere from $40,000 to $120,000. The market has never been greater for sales of MRP

II software and suppliers choose who they want to have as their clients. If the small

company appears unknowledgeable and inexperienced, this might be interpreted as a

headache by the supplier, and they can choose not to work with the small company. For

this reason alone, an experienced consultant can benefit the small company by helping

them create methodical processes in the software selection process, that will minimize the

time spent by both the software manufacturer and the manufacturing firm.

The Various Roles Involved with Software Selection

Many times software implementations have failed because of the lack of

commitment by management and “users.” It is important that management show their

support and that the “users” are very involved from the conception of the project through

completion.

4

Management must set the scope, understand the objectives and stand behind the

implementers. Management must subscribe to the scope of the project, but leave the key

decisions to the people who will be implementing and using the software package.

Involving key employees in determining which features and functions are

important is critical. When software falls short of expectations, the reason could be buy-

in of the new system. When key people are not asked for their opinions they can feel

resentment. Functional areas, processes and a study of the current information system is

necessary. A project manager is elected. This person will be responsible for leading the

project. The project manager must be respected for their leadership abilities because they

will have to command respect from members of the users group and management.

Everyone must know that implementation will take place and that support is critical to the

success of the project. It will be important for the users to be involved in the

demonstrations and on-site visits in the final round of selection.

Narrowing Down the Selection and Making a Final Choice

There are hundreds of MRP II software packages on the market today. What is the

most effective way to come up with a short list of candidates? Directories and guides will

help lead you to the appropriate systems. APICS publishes analysis reports on various

MRP II software packages in their monthly magazine and on their website:

www.apics.org.

Participating in benchmarking sessions with other small manufacturers can also

be a great way to find out what others are using and how they maximize the effectiveness

of their software. Finally, hiring a consultant to help guide the process may be your best

http://www.apics.org/

5

choice if human resources in the company are limited. If you choose a consultant, they

should only guide you to the finalists.

The final selection of the software package is the responsibility of the project

team. The first phase would be generating a RFQ. This document should be no longer

than ten pages. The supplier will typically spend four to eight hours answering the

documentation, so keep it precise and save time for all involved. The next phase will be a

demonstration of the software for the selection team. Plan on at least at least four hours

for this exercise.

Before negotiating the price of the software the project team should conduct a

personal visit to other manufacturers using the software packages. If the need analysis

and evaluation processes are followed, chances are good that the best software package

will be acquired for the company.

Methodology

A review of the literature on the topic of MRP II software selection helps inform

the reader why a process is necessary in software selection and reveals the logical steps to

take. It also conveys who should be involved in the process, how to prepare and what to

expect along the way. The literature review consisted of periodicals, books, and special

editions of publications specifically related to the selection of MRP II software selection

and expert opinions from consulting firms.

A questionnaire was prepared and sent to prospective suppliers asking them key

points about their company’s philosophies and guidelines. The questions were numbered

and all software candidates received the same questionnaire. The questionnaire was

6

proofread by experts on MRP II software and revised accordingly. Responses were

received and the field was narrowed down to five candidates.

The project team created a “punchlist” which was sent to the five software

candidates and a demonstration of the software was conducted at each of their facilities.

This process resulted in the elimination of one of the five candidates, because they were

unwilling to reveal names of their clients for reference for a subsequent survey that would

follow.

The project team at Company XYZ and the consultant created a list of important

qualitative criteria, which in turn resulted in a survey form. This process was completed

using a quality tool technique called nominal group technique using a variation of

multiple voting to determine weight values for the criteria being measured. The survey

answered sub-problems related to the opportunity through forced choice questions to

desired qualifications in the area of customer service and support. Each participant was

asked to grade questions. An example was “Please grade from A to F - User

Friendliness.” The participants, who were employees of companies using the MRP II

packages, worked in accounting, materials management and information systems and all

had a minimum of five years using MRP II software packages. When the survey was

completed the grades received a numerical value and a weight was assigned to each

numerical as a result of the nominal group exercise. The category of “User Friendliness”

was given a weight of .30. The grade values were added and averaged and then

multiplied by the weight resulting in a numerical value for that category. All numerical

values were added to establish a grade point for that software package. The researcher

conducted the survey and was also the consultant for Company XYZ. Formulation,

7

polling and analyzing the survey took approximately 110 hours. The survey was pre-

tested by two experts in the MRP II field. Both experts agreed that the survey was clear,

ethical and free of any prejudice.

Reliability and Validity

There were approximately 15 respondents to the survey. Before the survey was

given it passed a pretest that constituted a high degree of content validity. All questions

asked in the survey were identical. All individuals involved in the survey had five or

more years of experience using MRP II software packages. Face validity is established by

the currency of the articles (all within the last two years).

Limitations

Because of time and money limitations all participants of the survey were

references of the software companies being evaluated. The software manufacturers and

their representatives are very guarded about giving out the name of their clients to protect

them from spending too much time on good will efforts that benefit the software

company. Because references were used, the responses could be skewed to a positive

response, but the researcher feels confident that the respondents were speaking from

experiences, honestly and without bias.

Protection of Human Subjects

All individuals and their respective companies participating in any survey or

questionnaire for the purpose of this study are protected. No names are mentioned unless

prior permission has been granted by that individual or company. The survey and

questionnaire used in this study were reviewed by experts to prevent any prejudicial or

unethical material.

Chapter II

Literature Review

Introduction

This research paper centers on the elements in relation to the recommendation of

materials resource planning software for Company XYZ, a small high technology

manufacturer located in the upper midwestern part of Wisconsin with sales of $2.5

million and 18 employees. Although the focus of this project is on the recommendation

of MRP II software in relation to the processes and requirements of Company XYZ the

findings and recommendations in this study can easily be used by other small companies

with similar demographic characteristics.

Small manufacturing firms begin seriously thinking about budgeting for

manufacturing software when the costs of keeping their accounting, inventory records,

production schedule, and shipping records—usually kept on various spreadsheets—

become time consuming and costly to manage. It is at this point that they start the process

of looking for integrated business software. At first glance, the business periodicals may

confuse them because they focus primarily on Enterprise Resource Planning (ERP) which

is extremely costly for the small manufacturer. Large ERP software packages are priced

by the quantity of modules purchased and can cost a business anywhere from $1 million -

$180 million to implement (Dozbaba, 1998). Small manufacturing firms have neither the

need nor the budget to justify this type of selection. When you compare Figure 2.1 –

MRP II Model (Burt & Pinkerton, 1996) to Figure 2.2, an ERP Model, you have to

question whether the extra cost of ERP software packages on the market are

9

Figure 2.1 – MRP II Model

justified. In fact, many software companies are adding a human resource module and

reclassifying their software programs as ERP software. The ERP revolution started in the

1990s and depicts the addition of asset/resource optimization and Y2K solutions. “While

we knew we had outgrown our in-house system, we simply couldn't afford the big-ticket

alternatives…” said Terry Clausen, Materials Manager of ICDA, a small US company

with turnover under $5 million (Meikle, 1997, p. 14). Never fear, it does take a little more

research, but there are several PC-based MRP software packages that will be more than

adequate for the needs of the small manufacturing firm and can be implemented for

$50,000 or less (Diamond, 1997).

10

The goal of this research project is to find and recommend the best MRP II software

package for Company XYZ. The topic areas of this chapter are listed below:

• Reviewing MRP II implementation as a key business strategy.

• Defining MRP and MRP II.

• The objectives of MRP.

• The results of successfully implementing a MRP II package.

• Why doing a thorough job in selecting your MRP II software is critical.

• PC-based MRP II software packages.

• Challenges of MRP II software selection for the small company.

• Where to look for the sources of supply when choosing MRP II software.

11

• A review of the sequential process necessary to be successful at software

selection.

The Implementation of a Manufacturing Resource Planning System

is an Element of the Strategic Business Plan

Although an MRP II system utilized in the proper manner has many benefits and

rewards for a company, the implementation of a MRP II system can be very costly and

time consuming. Therefore, the commitment to implement such a system must come

from the very top of the organization. A formal scheduling system that really works

becomes the cornerstone of the company game plan. There must be a new set of values

and objectives (Wight, 1982). The chief executive officer (CEO) will have to establish

line accountability for meeting stated objectives such as:

• Inventory records have to be 100% accurate.

• Bills of material must be a controlled document.

• The master schedule can not be a “wish list.”

Executive management also needs to understand the dynamics and importance of

a MRP II system. Top management in some companies still believe in overstating the

master schedule. This gives the same results as order launching and expediting. It causes

parts shortages that are not reality and soon shortage lists are created to define the “real”

shorts. The master schedule can no longer be a motivational tool, but must be operational

information. After implementation, the CEO can still show commitment to the system by

signing off on any master schedule changes. Top management understanding and

commitment is so critical that Oliver Wight recommends that MRP implementation

should not be considered until top management is educated (1982).

12

The Objectives of MRP Defined

MRP is a new name applied to an old established procedure. It is a program for

production scheduling, inventory control, and the scheduling of purchase orders. MRP

allows management to time efficiently the ordering and manufacturing of components

and subassemblies that make up completed products of dependent demand (Burt &

Pinkerton, 1996). The major objectives of MRP are:

! To ensure the availability of components and subassemblies for planned

production to meet customer deliveries or build a stated amount of inventory.

! Minimize your inventory investment.

! Plan procurement and manufacturing activities.

! Reschedule procurement and manufacturing activities as required.

Three principal elements of MRP are:

! The production schedule is generated from the master schedule.

! An accurate bills of material file.

! The inventory status files: what is in stock, on order and allocated to

production.

How MRP and MRP II Relate to Each Other

Material Requirements Planning is a process. MRP II is the computerized

program that provides a comprehensive software package for manufacturing planning and

control, including MRP, capacity planning, shop floor control, procurement, engineering,

quality management, and cost accounting. The effectiveness of planning and control

depends very little on the elegance of the computer program. Its ability to help the users

13

run their businesses well depends on how well they use it, not on how well it has been

designed technically (Plossl, 1994).

The Definition of Class A, Class B, and Class C MRP II Users

During an APICS meeting, it would not be unusual to find members discussing

whether their companies are Class A, B, or C users of their MRP II packages. Class A

companies use their MRP II as a company game plan and can get along without a

shortage list because they schedule well. Class B companies have a good closed loop

MRP system, but don’t really use it as a company game plan, and the Class C companies

use it as an inventory control system. Even the Class C users can gain improved delivery

performance from the use of their MRP II systems. A University of Minnesota survey

done in 1979 included 326 companies using MRP II systems revealed that delivery

performance improved from 64 to 81 percent (Wight, 1982). Today, companies are

striving to reach on time delivery percentages in the high 90s with the ultimate goal being

100% on time delivery to customers or company stores.

The Benefits of MRP Applications

Without the MRP II software packages available businesses would not be able to

manage the complexity of planning for and controlling many products and parts that

interact with one another. Such complexity defies manual control procedures. MRP

considers the time dimension in planning and the current and planned quantities of parts

and products in inventories. MRP takes into account the dynamics of time and quantity

for interrelated parts and products. With the significant reductions in the cost of high-

speed computation we have gained in our computer hardware, MRP can now rapidly and

inexpensively update order priorities weekly or daily as plans change and expectations

14

require. Rapid computation is required to explode component requirements from the

master schedule while simultaneously referencing inventory records to check stock status

and lead times to keep the plan sufficiently current (Burt & Pinkerton, 1996). The

following benefits result from successful MRP applications:

♦ Reduced inventory investment. Inventories of purchased material and work in process

will decrease by 10-30%.

♦ Reduced administrative effort. Scheduling, inventory control, and purchasing will

become more efficient, leaving time for personnel to accomplish more productive

tasks.

♦ Reduced manufacture of obsolete components. Through the use of product structure

records that reflect planned engineering changes, manufacturers are able to schedule

effectivity dates for changes. This ability will decrease scrap cost significantly.

♦ Improved customer relations. MRP can be used to determine delivery dates to

customers before promises are made. If the promised delivery date goes off schedule

and cannot be met, customers can be notified in a timely manner so they can revise

their plans and minimize the inconvenience.

The companies that are choosing to utilize MRP II as an integrated management

process are significantly improving their business performance and competitive positions.

Some examples as stated in the article MRP II in the Year 2000 are as follows (Correll &

Goddard, 1994):

♦ Gallo Salame of San Lorenzo CA, cut the total cost of goods 10% and improved

productivity more than 40%.

♦ Trendway Office Furniture of Holland MI, increased sales and market share by 20%.

15

♦ Brasscraft of Southfield MI, increased sales by 13%.

♦ ICI Pharmaceuticals Division of Australia, increased sales by 15% while reducing

stock as a percent of sales by 38% and cutting cycle times by 50%. These

improvements contributed to a savings of more than $2 million in working capital.

Doing a Thorough Job in Selecting Your MRP II Software is Critical

Implementing a new MRP II software package is a very expensive and time-

consuming task. Companies on average change their software only every seven to ten

years. Computer conversions that go astray can cost more to fix than the cost of the

software. Failure rates are high. Twenty-five to fifty percent experience significant

failure. Seventy-five percent of systems implemented are considered poor (Kuiper, 1996).

Reasons for failure are:

♦ No organized methodology for implementation and users were not prepared for

problems.

♦ Time lines were not kept.

♦ The project team became demotivated.

♦ Lack of commitment, training time and testing time.

To implement a MRP II system successfully, several prerequisites are essential:

" A commitment by all levels of management. Top management must be involved at

the conceptual level and then step back to monitor and support. It is not advisable

for top management to be involved at the “hands-on-level.”

" You must define what type of manufacturing business you are: 1) make to order, 2)

engineer to order, 3) make for stock, 4) mixed mode, or 5) batch or process.

" A project team needs to be selected and a project manager assigned.

16

" The project manager must be an insider, have authority to make decisions and stay

cool under fire.

" Get a thorough evaluation of the software packages available. If you do not have the

time or expertise, hire a consultant, but do not let the consultant make your final

selection.

" There must be stable employment for those who will implement and use the system

during its initial stages of operation.

" The availability of timely and accurate data such as bills of material, inventory

records and stores counts.

" The active involvement of those who will use the system.

" Schedule stabilization (Burt & Pinkerton, 1996; Kuiper, 1996).

It is important to do vendor reference checks and visit users’ sites before making a

final selection. Ask users qualitative questions on reliability, responsiveness and the

quality of their support services. It is important to remember that “What you don’t know

can cost you a fortune” (Kuiper, 1996).

An Overview of PC-Based MRP Software Selection

PC-Based MRP II Software

MRP/MRP II has traditionally been associated exclusively with mainframes and

minicomputers. Since the mid-80s, trends indicate that PC applications for manufacturing

continue to evolve. Options include those supporting the Window’s platform and a host

of other different network operating systems. Today, software for MRP implementations

using the PC are full-fledged, powerful programs and many of these programs have the

ability to grow with the company. With these new planning and scheduling tools,

17

manufacturers are able to reduce manufacturing cycle times, reduce costs across the

enterprise, and increase inventory turns (Diamond, 1997).

Challenges in MRP II Software Selection for the Small Company

Resource allocation.

Small companies do not have the budget or sizable information systems (IS)

departments that the large corporations have to assist them in searching for the correct

software packages. Employees in the company are already multitasking and can not

afford to take the time or effort to search for the appropriate MRP II software package. In

some cases, they just buy an off-the-shelf software package and end up paying for

conversion time when they realize the inconvenience and secondary systems necessary to

use the software are inefficient and costly. Hiring a consultant is one solution to solving

the resource issue; for this solution to be successful the relationship between the company

and the consultant has to be a two-way street (Taylor, 1998). The consultant will have to

develop a “needs assessment” profile. This analysis is accomplished with the “users” of

the software within the company.

A careful study of your information systems reveals logical paths for the flow of

data, which help to define your requirements within your company, as well as to outside

consultants. An experienced consultant is the best person to define and document these

structures. He should have a solid understanding of your company, and the ability to

incorporate the details of your daily operation into the software analysis (Needle, 1999).

Choosing your MRP II software without expertise is dangerous unless you have

enough systems expertise and current knowledge of the software package marketplace.

Few companies have this knowledge. An outside consultant can help you “think outside

18

of the box” as part of the planning for a new information system. Without an outsider’s

view you may find that you do little more than saddle the operation with the

shortcomings of the past (Kuiper, 1996).

Overcoming the fear of change and “buy-in.”

It is a factor in all companies, but fear of change can be stronger and more

difficult to overcome in small organizations (Taylor, 1998). Four elements will help

eliminate the fear of change and “buy-in” from the employees. They are 1) the direct

impact on improving a person’s performance, 2) the perceived “ease of use,” 3) adequate

training, and 4) management support.

The degree to which a person believes that using a particular system will enhance

his or her job performance has a direct impact on acceptance of a new software package.

Along with this, the ease of use is an important determinant of system usage and may

actually be a causal antecedent to perceived usefulness (Cavaye, Cragg, Igbaria, &

Zinatelli, 1997).

Training also has a direct effect on perceived usefulness. It promotes greater

understanding, favorable attitudes and more frequent use. It is important for managers to

budget for thorough user training; especially in smaller companies without internal IS

resources.

Studies have identified management support as one of the essential recurring

factors affecting system success. In small firms, the CEO has a greater influence on a

company’s performance than does the CEO of a larger firm. The next two sections of this

report will focus on defining the roles of management and “users” in the software

selection process.

19

Creating an environment of respect with software suppliers.

When suppliers look at small companies, they see a prospective sale that will

range anywhere from $40,000 to $120,000. Sometimes suppliers assume that they will be

dealing with unknowledgable and inexperienced users, which means implementation

headaches. Suppliers typically address small manufacturers by:

♦ Not responding to detailed functional request for proposals (RFP) or request for

quotes (RFQ).

♦ Sending literature in lieu of the RFP response

♦ Not giving demonstrations unless they are included on the buyer’s short list.

Being treated with the same respect as large manufacturers is the goal of small

businesses, but the buyer must accomplish this by creating an environment that induces

vendors (Software selection, 1999). Listed below are a couple of “must do’s” if a

software supplier is going to grant you the same respect as a large potential customer:

♦ Narrow down the list of prospects to three or less.

♦ Develop a detailed systems specification.

♦ Weigh the importance of specific requirements.

♦ Select two or three key issues and describe them in a one-page summary.

♦ Conduct phone interviews.

♦ After receiving and reviewing literature, send a concise questionnaire of no more than

100 questions.

20

The Various Roles Involved with Software Selection

Too many times software implementations have failed because of the lack of

commitment by management or the “users.” MRP II software implementation is not only

time consuming, but extremely costly and the software will generally take the company

through seven to ten years of growth. It is vitally important that management show their

support and that the “users” are very involved from the conception of the project through

completion.

Management’s role in the selection process.

During the early years of the software selection process, the established credo was

that implementation of large-scale integrated manufacturing systems should not be started

without the direct, knowledgeable support and involvement of upper management.

Unfortunately, this policy often did little more than squander the valuable time of top

managers (Management’s role, 1994).

Management must set the scope, understand the objectives and stand behind the

implementers. Management sets the bounds and framework through its vision, direction

and policies. Management defines the business environment that includes organization,

structure, industry, policy, scope and function. It is there to answer pertinent questions

about business practices. Management must subscribe to the scope of the project, but

leave the key decision-making answers to the people who will be implementing and using

the software package. Management must answer the big questions, chart the course and

monitor the progress (Management’s role, 1994).

21

The role of the “users.”

Involve key employees in determining which features and functions are needed.

When software falls short in meeting client expectations, one of the most common

reasons is lack of buy-in to the new system (Needle, 1999, p. 3). When key people are not

asked for their opinions during the decision process, they may feel left out and resentful.

It is important to get the “users” involved in the steering committee and the selection

committee. Prioritizing your requirements is a two-step process where the steering

committee first establishes overall importance by functional area (in a small company

however they may be one in the same). The selection committee then develops the

detailed “needs analysis” (Selection committee, 1994). A careful study of your

information systems reveals logical paths for the flow of data that will help you define

your requirements within your company, as well as to outside consultants. A project

manager must be selected. This person will be responsible for making things happen

among diverse factions, each with its own agenda. For example, the finance people will

be more concerned with costing and control than with production and sales, where

customer service is so concerned. The project manager must command respect from

members of both committees and have a proven record of accomplishment as a manager

(Navigating departmental issues, 1998).

It will be up to the users to specify what they want the software to do. They could

come up with a list of up to 700 items. It will be important for them to define the “must

haves” from the “like to haves.” Everyone must know there is no alternative to

implementation, and they have to understand that if the software works for the

requirements they specified, they will not be able to withdraw their support. It will be

22

important for the users to be involved in the selection process and participate in the

demonstrations given by the last round of software suppliers. The users should also go on

site visits to other users so they can get a look at the software system in action. The

involvement of the “users” is paramount to a successful software implementation.

Narrowing Down the Selection to Three or Less Choices

In most cases, an initial search for software packages will turn up anywhere from

a dozen to hundreds of candidates. You will need to examine the packages closely to

determine which are actually capable of meeting your needs.

Identifying Software Packages for Consideration.

Directories and guides can help save time and will help you make sure you

include the appropriate systems in your evaluation. Among the most frequent questions

often asked of the APICS National Research Committee are: “What are the top 10 MRP

software packages?” and “What software do the most successful companies use?” APICS

can neither endorse nor recommend software products, nor consultants, but it does have a

list of useful sources of information about MRP II (Johnson & Malucci, 1998). They are:

♦ MRP II Software/Vendor Directory found in the September 1997 issue of APICS –

The Performance Advantage

♦ BDO Seidman’s Comprehensive Guide to Manufacturing Software - $400.00

♦ Buysmart – Available from Expert Buying Systems (800) 832-6434

♦ CTS, Guide to PC-Based Software for the Manufacturing Industry –

(800) 433-8015 - $895

♦ InfoROM – (317) 815-0401 - $125.00 for one publication or $195 for an annual

subscription of two publications.

23

After the “needs analysis” has been done within the company and a short list of

potential suppliers has been identified, it will be important to narrow the list down to

three or less suppliers for a selection team to investigate.

Steps Toward the Final Selection

Request for Quotation

A request for quotation must describe your company to the supplier with enough

detail that he understands the full picture, promote an understanding of the needed

software capabilities as it relates to functional requirements and solicit bids. The request

for quote should contain the following:

Statement of confidentiality.

A statement of confidentiality prevents the supplier from making the RFP and its

data available to any other company.

Creating an introduction.

Describe your company, the industry it serves, and the scope of the planned

systems. Describe only what the supplier needs to ensure he understands the framework

you need to run your system. This should be only a couple pages in length.

Creating department/function overviews.

Department or function overviews should describe the groups that will be

impacted by the new system and a brief description of any important problems the system

will address. One paragraph for each will suffice.

Stating the reason for change.

A summary, usually no more than one page, of why your company is looking for

new software should be included.

24

Stating the key issues.

These are the requirements that are a must. These should be completely described.

Ask for a narrative response and expect to address these key issues in the demonstration

phase.

Designating the field and file sizes.

Include these only if they are out of the ordinary. An example would be if your

part numbers are 25 characters long. Most software companies are approximately 6-8

characters in length.

Stating decision criteria and exhibiting a milestone chart.

Include the criteria that will be used to make the selection and a milestone chart

so they understand your time line for implementation.

Stating the terms and conditions.

Include your boiler plate terms and conditions.

Your RFP should be no longer than 10 pages in length. The supplier will typically spend

four to eight hours answering the documentation, so make it something that can

effectively be dealt with in that timeframe. Keep it concise and focused and you will save

time for all involved in the selection process (RFP-why, 1997).

Supplier Software Demonstration

Before a decision is made it will be important for you to have the supplier do a

demo presentation for the selection team. This will last approximately half a day so plan

appropriately. You should have a “punchlist” of systems functions that you want the

supplier to demonstrate with the software. The supplier must not take control of the

demo. This is your show and you must orchestrate it. Do not let the supplier come in and

25

dazzle you with his software. Keep the demonstration to the list of key issues. The

agenda is also your demonstration scorecard, listing the capabilities stated by the

supplier. Do not be afraid to ask questions throughout the demonstration.

Throughout the process of selection, you must remember you are making a major

decision for the company. If you get it wrong, your company will not realize the benefits

for which it has spent significant money and resources (Software demonstrations, 1997).

Visits to Other Manufacturers Using the Software Packages

With a list of your finalists in hand, schedule a personal visit to manufacturers

who are using the software packages. It will be important to talk to the hands-on users,

not MIS managers. Have them walk you through a typical day using the planning and

execution systems. At this point, you should get honest answers. Following are vital

questions to ask during your interviews of the users of the software:

• What changes have they made to the original package?

• How have they customized?

• Who owns the customized package in terms of support?

Suppliers typically support only their own packages – not those that have been

customized. Supporting custom reports is usually an extra charge by the supplier

whenever an upgrade is issued (Johnson & Malucci, 1998).

Ranking the Suppliers

It will be a good idea to come up with a method to rank your software suppliers.

This will be a combination of objective scoring (hard facts) and subjective impressions

(soft issues). The objective scores, at the detailed requirements level, measure how well

26

each supplier’s software will meet your needs. The subjective issues concern opinions

and feelings such as: user friendliness and best support (Ranking the vendors, 1994).

Making the Final Selection

The final step will be selecting the best choice of MRP II software for your

company. Before all the i’s are dotted and the t’s are crossed, it is important to make a

visit to the software supplier’s facility to meet the people who you will be working with

as a strategic business partner for the next several years. If you have followed the needs

analysis and evaluation process, you are far more likely to choose the best software

package for your situation.

Conclusion

The literature covered in this review laid the groundwork for the design of the

questionnaire, punchlist and survey that were used in this study. It is clear that with the

appropriate research and a planned methodology, the chances for success at choosing the

right MRP II software package can be achieved.

27

Definitions

APICS American Production and Inventory Control Society

ASP Automated Service Provider

CEO Chief Executive Officer

ERP Enterprise Resource Planning

IS Information Systems

ISO 9000 International Standards Organization 1987 Standards on Quality

MRP Material Requirements Planning

MRP II Manufacturing Resource Planning

PC Personal Computer

Punchlist A list of requirements a customer wants the software to be able to

perform.

RFP Request for Proposal

RFQ Request for Quote

Chapter III

Research Methodology

Research Opportunity

This paper represents the research that was conducted to narrow down the

selection of MRP II software packages, and recommending three packages that would

provide the best fit for Company XYZ, a small high technology electronics

manufacturing company in midwestern Wisconsin. Along with the three

recommendations a list of companies using the software will be documented for

benchmarking. This chapter details the design of the research, validity and reliability of

findings, limitations of the study and ethical considerations.

Research Design

Nature of Study

This research project is a case study, descriptive in design. Company XYZ is a

growing company that is in the investigation phase of acquiring the best manufacturing

resource planning software available for their immediate needs and growth potential. The

steps that were taken to accomplish the objectives for this project are:

1. Conduct a “needs assessment” and documenting processes.

2. Define any limitations.

3. A literature search for methodologies for selection of software and available

MRP II PC based software.

4. Design a questionnaire, punchlist and survey to provide a tool for collecting pertinent

data.

29

Sources of Data

The literature review provided the researcher with a list of references that

documented methodologies on selecting appropriate MRP II software packages. These

references resulted in choosing The Guide to Accounting Software for Microcomputers, a

review done by Computer Training Services in Rockville, Maryland to narrow the field

of appropriate software packages to seven, and also aided in developing the questionnaire

that was sent to the seven candidates.

The “needs assessment” and resulting processes done at Company XYZ were the

source of the punchlist that would be used for the demonstration by four of the software

candidates. The researcher conducted a meeting with the project team at Company XYZ

to develop qualitative questions for an assessment tool or survey using a quality training

tool: Nominal Group Technique.

Data Collection Procedures

The “needs assessment” conducted at Company XYZ resulted in defining which

modules are appropriate for the needs and growth of the company. Analyzing and flow

charting their processes determined these needs. For example, we found that there is a

need within their system for a production control module, but the necessity for job

tracking or routings is not necessary immediately.

The nominal group technique was used to identify a list of important qualitative

criteria (i.e. “user friendly,” adequate training and support, etc.). Once this list was

developed, the importance of each area was determined by using a variant of the

“multiple voting” process which allowed the participants to rank the importance of items

on the list. Every participant got 100 points to divide amongst the different areas

30

according to what they felt were most important. The numerical values given for each

category were added and they translated into percentages of the whole to establish

weights to the different elements of the survey results. The results of the exercise were

the foundation for creating a survey using the comparative scaling approach.

This survey was pilot tested or pre-tested by personally interviewing two

professionals who had several years of experience using MRP II software programs.

Once the pilot test was complete, and any necessary modifications to the instrument were

completed, representatives of the three finalists gave references and “users” within those

companies participated in the survey. The individuals polled were chosen by a non-

probability sampling technique called judgment sampling. This sample is appropriate

because the researcher requested only a list of references that were demographically

comparable to Company XYZ and were using the three software packages selected.

Reliability and Validity

It would be extremely time consuming and costly to research the elements of all

of the PC-based software available today for materials requirement applications. Only

one source will be used to narrow down the field into three suitable software candidates;

the Guide to Accounting Software for Microcomputers, a compilation of results from a

yearly review done by Computer Training Services in Rockville, Maryland. Computer

Training Services (CTS), founded in 1983, is one of the few companies which does

independent research, evaluation and reviews on PC-based accounting software in a wide

range of vertical markets including small manufacturing businesses. The review is

comparative and covers these areas:

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• Inventory management

• Bill of materials and product costing

• Purchasing

• Customer orders and sales analysis

• Manufacturing execution

• Manufacturing planning

• General ledger

• Accounts payable

• Accounts receivable

• Systems Features: Capacity, Searching Functions, Client Server Support

Two methods were used for cross validating the recommendations:

1) Recognition of the software in a 1997 survey done by Plant-Wide Research

Corporation of North Billerica, Maine ranking the top 100 software vendors for

manufacturing.

2) A survey measuring qualitative attributes of the three finalists was conducted by the

researcher on customer service related issues.

Limitations

Company XYZ did not want money or time spent on this project, nor did they feel

any research was necessary to investigate hardware requirements for the software. The

only request is that the researcher made sure that all finalists’ software would run on

Windows NT.

32

The company also recognized that their weakest area of expertise and the one

with the greatest opportunity is materials management. Therefore, this research paper

focuses mainly on materials management requirements.

Ethical Considerations

All individuals and their respective companies participating in the survey or poll for the

purpose of this research are protected. No names are mentioned unless that individual or

company granted prior permission. The survey and questionnaire were reviewed by

experts to prevent any prejudicial or unethical material.

Chapter IV

Findings of Analysis of Results

The Needs Assessment

A needs assessment is the first step in the process of defining the modules in an

MRP II software package the company needs to perform at desired efficiency. One of the

easiest ways to do this is to map out all processes and procedures involved. Company

XYZ completed this process and Appendix A – Non Applications Order Process Flow

and Appendix B – Applications Order Process Flow are examples of this investigative

procedure utilizing the construction of flow charts for processes. All potential users of the

new MRP II software should be involved in this activity. If a company is ISO 9000

approved, many of these processes and procedures can be found documented in the ISO

Quality Manual for the company and this process can be used for review and update. If

ISO 9000 policies and procedures are in place, this saves time and money in the needs

assessment portion of the research.

Company XYZ identified the following MRP modules that they need in their new

software package:

! Inventory Management

! Purchasing

! Bill of Material & Product Costing

! Purchasing

! Customer Order & Sales Analysis

! Manufacturing Execution

! General Ledger

34

! Accounts Payable

! Accounts Receivable

! System Features

The efficiency and effectiveness of these available software programs and their

associated modules were reviewed via two different approaches:

1. A comprehensive survey done by Computer Training Services on PC-Based MRP II

software packages and;

2. A demonstration of the software package using a “punchlist” of criteria the users

deem are important to maximize the efficiency of the software.

Both of these approaches are discussed later in this chapter.

Computer Training Services Analysis

Computer Training Services is a company that does a very comprehensive

analysis on PC-Based software for manufacturing. The CTS guide was the tool that was

used to proceed with the second phase of the selection. The CTS guide contains 350

pages of detailed information about 23 different software packages used for MRP

applications. The following modules are addressed:

General Ledger Accounts Payable

Inventory Control Accounts Receivable

Order Processing Purchase Orders

Bill of Materials Master Scheduling

Shop Floor Control MRP

Capacity Planning Job Cost

35

CTS has several charts featuring over 1600 different software capabilities that

companies can pick and choose from in their analysis in choosing the right product for

their company. All of the characteristics are rated from 0 (not available), 1 (difficult work

around) to 4 (full credit). An example pulled out of the Inventory Management section is

shown below in Figure 4.1

Software Company #1 #2 #3 #4 #5 #6 #7 #8 #9Drawing number 4 3 0 4 3 4 4 4 4Consignment inventories 4 4 3 0 0 2 4 3 0Obsolete item identifier 3 3 4 0 0 4 4 4 4Product line 4 4 4 4 4 4 4 4 4Commodity code 4 3 4 3 4 4 4 4 4Price codes 4 4 4 4 4 4 4 4 4

Inspection code and instructions 3 4 4 4 4 4 4 4 4Receiving tolerance 0 4 0 0 0 4 0 4 3Planner 4 4 4 3 3 4 4 4 4Buyer 4 4 4 4 3 4 4 4 4

Units of measure - purchase to/stockto/selling

4 4 4 3 4 4 4 4 4

Substitution item numbers 0 4 4 4 3 4 4 4 4Revision level 4 4 0 4 4 4 4 4 4Maintain multiple revisions-same item 2 4 4 4 3 4 4 3 0ECN 0 4 0 4 3 4 0 4 4

Figure 4.1 - CTS rating example

Taking the eight categories that are significant to Company XYZ, and identifying

those capabilities the MRP II software must have, the field of potential candidates were

narrowed down to seven. This was done by adding up all the points in the capability

fields that were identified as important. The total scores ranged from 2,826 to 3,589 and

the top seven candidates are listed in Figure 4.2.

36

Top seven software packages

Candidates Score

ROI 3,589 Made2Manage 3,502 EMS 3,481 Visual 3,469 Fourth Shift 3,453 MRP9000 3,448 Impact/Encore 3,442

Figure 4.2 – Top seven selected MRP II software candidates

Questionnaire Results

The next step in the research was the development of a questionnaire to be sent

out to the seven preliminary software candidate suppliers listed above. The development

of this questionnaire was accomplished using the important points for choosing software

listed in Chapter 2 of this research project. It was then sent out to two MRP II software

experts for proofreading, modified per their recommendations, and forwarded to our

seven candidates. The researcher was looking for expedient, comprehensive answers to

the questionnaires and an approach to comparing the costs and customer service of the

seven candidates. The final draft of the questionnaire is found in Appendix C – Supplier

Questionnaire. A comparison of the answers given from the suppliers is found in

Appendix D – Supplier Questionnaire Responses. Summaries of the findings follow.

Costs

The costs associated with an MRP II software purchase are for each individual

module, the implementation and education, and the associated help line and upgrade

costs. When combining the total costs of the software excluding the annual fee (which

37

ranges from 12% to 18% of the initial software cost) the software of choice will range

anywhere from $60,965 to $100,000. The education costs can be lowered depending on

the expertise of the people actually using the software. It is noted that all of the

companies do lease their software which could cut down considerably on the immediate

cost of the software.

Availability of Help and Education

The client is billed anywhere from $95.00 to $125.00 per hour for help line calls.

Only two companies did not have 800 lines, but they call you back to help cut down on

the costs, and only a couple of the software representatives would commit to a certain

time frame in which they would get back to you in regard to your questions.

Two of the corporations, ROI Systems and Fourth Shift are located in Minnesota,

which is convenient and all of the companies offer education on-site, at their

representative’s facility, or at their headquarters. There is an additional charge for this

service. Only Fourth Shift offers night and weekend technical support.

All of the companies have representatives in Minneapolis or St. Paul, Minnesota

except Syspro (Impact/Encore). The Impact/Encore representatives are located in St.

Cloud, Minnesota.

Implementation and Administration of Software

Implementation time does vary. The software representatives who responded to

our questionnaire quoted anywhere from 14 to 180 days depending on the difficulty,

extent and training necessary to implement. Only three companies said that the

administration of the software could be handled on a part time basis. They were Visual,

Impact/Encore and Fourth Shift. During a later survey, these findings were validated for

38

only two of the companies, Visual and Impact/Encore. All companies using Fourth Shift

had a full time IS manager.

Cooperation

Only one company, ROI Systems, was willing to give a list of their customers

highlighting those who were manufacturing firms less than $10 million in sales. All the

software companies responded to the questionnaires in a timely manner.

Benchmarking Software Package Capabilities

The fourth step in the process was to create a list of characteristics which the

users would want the software to perform proficiently: this is called a “punchlist” in MRP

software language. The users at Company XYZ created a punchlist which was used in

interviews and demonstrations conducted by the researcher at five out of the seven

software companies (Appendix E). EMS and MRP 9000 did not respond to requests for a

software demonstration with the researcher at this point. It was the decision of the

consultant and the president of Company XYZ to eliminate them from the possible list of

potential software candidates. The results of the demonstration of the characteristics

desired on the punchlist are found in Appendix F.

Summary of Demonstration Results

The demonstration results are imperative to not only choosing the appropriate

MRP software package, but will also aid in negotiations to purchase the software. The

packages available for small - medium sized companies rarely will be able to replicate

everything that a company desires, but these requirements can be negotiated if the

customer is aware of them during the negotiation process.

39

ROI Systems.

ROI’s Manage 2000 performed impeccably on all criteria on the punchlist. The

points that stood out in the Manage 2000 software are:

! The software stands alone in its capability of report writing. Its dictionary for the

report writer is very comprehensive. This point was validated by the subsequent

reference checks with users of the software. Manage 2000 was the only software

package where report writers were not using Crystal reports or another package to

help write custom reports.

! Manage 2000 was one of only two of the software packages that could classify parts

as free stock, bin or floor stock.

! Manage 2000 was the only package that could generate a user designated list of

purchase requisitions.

! Manage 2000 was the only software that could compare several bills of materials,

reporting only the differences in the bills.

! Manage 2000 was the only package that separated independent demand usage (those

not pegging to a bill of material and driven by MRP) and dependent demand usage.

Made2Manage.

Only 52% of the requirements listed on the punchlist were demonstrated during

the review of the Made2Manage software presentation. This software proved to be the

least capable of performing to the level desired by the customer. The response to four of

the questions being asked during the demonstration could not be answered and a response

was promised by the representative of the software company. There was no follow-up to

40

these unanswered questions. The representatives for Made2Manage were also unwilling

to give a list of references to contact. It was the decision of the consultant and the project

team of Company XYZ to eliminate Made2Manage after this phase of the project due to

lack of cooperation. It was felt that if they were not interested enough in the potential

business during the “sale” that they could not be depended on to follow up with good

customer service after the software was purchased.

Lilly Software.

Visual software by Lilly was the only package that comes with all the modules tied

into the purchase price. The capabilities of the software were demonstrated in all but

six of the twenty-nine punchlist requirements. The six areas that were not

demonstrated are:

! The ability to generate a standard report to measure the percentage of defects received

from suppliers.

! A quality module that tracks the history of parts received.

! The ability to classify parts as free stock, bin or floor stock.

! The ability to generate a user designated list of purchase requisitions.

! Running bills of materials with a substitute part number. (None of the software

packages could do this.)

! The ability to compare several bills of materials for differences.

The ability to do unit of measure conversions is very easy to do with Visual compared to

the other packages.

41

Syspro.

Impact/Encore by Syspro was definitely the easiest software to understand and work

with. The fact that this software was the only package other than Manage 2000 that could

classify parts as free stock, bin and floor stock was impressive and a “must” for ease of

use by Company XYZ. Another key point is that the representatives supporting the

software after the sale, RT Enterprises, only quoted $95.00 per hour for their assistance,

where all other companies charged $125.00 per hour. The one drawback and an

additional anticipated cost was the closest hands-on support is in St. Cloud, Minnesota,

three hours from Company XYZ’s facility. All other software companies had

representatives in the Minneapolis, St. Paul, Minnesota area, 1½ hours away from the

manufacturing facility.

Below are listed the criteria that the representatives from Impact/Encore could not

demonstrate:

! A quality module that tracks quality history on a part.

! A list of purchase requisitions designated by the user.

! Bills of materials that can accommodate substitute part numbers.

! The ability to generate a comparison of different bills of materials to identify only the

differences.

! Obsolete reports.

! Reports that segregate independent demand from dependent demand.

Fourth Shift.

Fourth Shift’s software is impressive and very sophisticated. If you have a good

understanding of what your job is and some familiarity with MRP software, maneuvering

42

around in this MRP II software will not be a problem. Their corporate facility is located

in Bloomington, Minnesota so when dealing with them, Company XYZ could do so

directly through the corporate office, not a representative. The base price on their

software package starts at $75,000 and can go as high as $140,000 after implementation.

This would make Fourth Shift the highest total cost software package reviewed. Fourth

Shift also had several items from the punchlist they could not demonstrate. They are:

! Parts can not be classified as free stock, bin or floor stock.

! Usage reports do not indicate whether demand was dependent or independent.

! There are no obsolete reports. (This was unusual considering the salesman reported

having over 400 canned reports that come with the purchase of the software).

! The software is unable to compare bills of materials for differences.

! Bills of materials do not reference substitute parts as alternatives.

! A user-designated list can not be generated for purchase requisitions.

It should be noted that because of the total cost of the software and its

sophistication, the president of the company and the consultant decided that the purchase

of this software would be a hardship for the company, so it was eliminated from

consideration. However, the President of Fourth Shift shared with the consultant that

Fourth Shift was interested in finding a beta sight for a new process called ASP or

Automated Service Provider. In this instance, Fourth Shift would bear the burden of the

hardware and assist Company XYZ in their conversion efforts. Company XYZ would use

the Fourth Shift software by tapping into Fourth Shift’s mainframe via internet access.

This cost now for using the software is only $1000-$1500 per month depending on the

number of modules you would use. The issue with this process is one of security. Fourth

43

Shift is confident that they can convince the customers of their ASP services that they can

provide absolute security. Participating as a beta sight usually entails excellent customer

service from the supplier because they want to proudly exhibit the successful model to

other companies. For this reason, we included Fourth Shift in our final step of the

process.

Results of Survey

The final step in the process was two-fold: 1) using the nominal group technique, (a

quality tool), users at Company XYZ defined what they felt were the important

qualitative characteristics. These results were used to 2) conduct a telephone survey of

users at companies utilizing the four remaining software packages still being evaluated

outside of Company XYZ.

The nominal group technique was used to identify a list of important qualitative

criteria. Multiple voting allowed the participants to rank the importance of the items on

the list. This resulted in a weight for the different elements of the survey and the

participants of the survey were asked to grade each category from A to F. A point value

was assigned to each grade: A being assigned a point value of 12 and F being assigned a

point value of 1. The researcher surveyed three individuals in materials management,

accounting or information services in three different companies. The grade point values

given by the survey participants were added together and then averaged and multiplied by

the weight for each category. The category scores were added. This resulted in an

accumulative grade for each software package. The results of the nominal group

technique exercise and the survey are found in Figure 4.3.

44

Average Grade X

Grade Weight Weight

ROI Systems

User Friendliness 9.40 30% 2.820

Ease of Report Building 7.75 20% 1.550

Training Support 7.25 20% 1.450

Help Line Efficiency & Effectiveness 6.00 20% 1.200

Accounting & RMA Compatibility 8.25 10% 0.825

Final Grade 7.845 B-

Fourth Shift






Final Grade 6.60 C+

Impact/Encore






Final Grade 9.08 B

Visual






Final Grade 9.80 B+

Figure 4.3 – Measurement criteria / survey results

45

Recommendation of Three MRP II Software Packages

The three highest grades received and the resulting three finalists are listed below:

Choice #1 Lilly Software Associates – Visual

Lilly Software Associates, a $61 million company, is rated #51 out of the top 100

ERP/MRP II software packages in ManufacturingSystems July, 1999 issue. This

company was established in 1992 and its corporate facility is located in New Hampton,

New Hampshire. The local representative for this software package is ProCon Solutions

located at 14000 25th Avenue in Plymouth, Minnesota. Visual scored a B+ in our

qualitative survey and the approximate total cost of implementation $68,000. Lilly offers

a money-back guarantee on its software if a company is dissatisfied with results after 40

consecutive working days of implementation. To date, no company has asked for its

money back. The web address for Lilly Software Associates is www.visualmfg.com.

Choice #2 Syspro Group – Impact/Encore

Syspro Group, located in Costa Mesa, California is rated #55 out of the top 100

ERP/MRP II software packages in ManufacturingSystems July 1999 issue. The company

has been in business for over 20 years and has implemented software in over 5,000 sites.

The local representative for this software package is RT Enterprises located at 411 Third

Street North in Waite Park, Minnesota. Impact/Encore scored a B in our qualitative

survey and the approximate cost of implementation of this software will be $55,000.

The web address for Syspro Group is www.sysprousa.com.

Choice #3 ROI Systems – Manage 2000

ROI Systems, located in Minneapolis, Minnesota is rated #82 out of the top 100

ERP/MRP II software packages in ManufacturingSystems July, 1999 issue. This 21 year

46

old company focuses on the electronics industry. ROI Systems scored a B- in our

qualitative survey and the approximate cost of implementation will be $64,000. ROI

Systems is the only company in the top three recommendations whose headquarters is

within a two-hour driving distance from Company XYZ. They were also the only

supplier willing to forward a total client listing in the Minneapolis area, and focus

primarily in the electronic industry. The web address for ROI Systems is

www.roisys.com.

A list of the companies who participated in our qualitative survey are found in

Appendix G.

Chapter V

Recommendations and Conclusion

Costs of a Manufacturing Resource Planning Software Acquisition

There will be five types of costs associated with an MRP II software purchase:

! The purchase price of the software

! The implementation cost

! The training cost

! The yearly maintenance fee

! Major upgrade charges

The rule of thumb is that a company will spend about 3% of their annual sales

volume for purchasing, implementing and training their employees for the acquisition of

a new MRP II or ERP software package. Company XYZ, a 2.5 million-dollar company

should spend no more than $75,000 on this acquisition.

All costs are negotiable. For example, the survey clearly indicates that help line

effectiveness and efficiency grade lower with users in every software package. This is

clearly an area for negotiation. The software companies will either charge a flat rate of

$95 to $125 for this service, or fold the cost into an annual maintenance charge, which

runs anywhere from 10 to 15 percent of the base price of the software purchase.

Education is readily available with all of the software packages. Detailed manuals

come with every software purchase. On-site training and seminars are available. This

type of training can be more than $1,000 per person and can be very costly for a small

company. A recommendation would be to create an expert within the company who can

go to the seminars and then utilize their expertise to train others within the company. It is

48

suggested the expert get involved with user groups. They are prevalent in the

Minneapolis-St. Paul area and peer groups benchmark and help each other with

improvements in processes and software education. Every MRP II software company

offers general education and upgrade information via the internet.

Once or twice a year MRP II software companies do a major upgrade to their

software. It is the client’s choice whether to upgrade. It will be important to gather a

project group to study the changes being offered to see if they will benefit the company

or hinder efficiency. There is usually a significant charge for this type of upgrade.

Another cost of these major upgrades is the maintenance of custom reports that the client

has created. It could cost up to $100 to upgrade each report.

Users of all software packages interviewed, except those working with Manage

2000 software, said that the report writer that came with the software package was not

user friendly and that they purchased Crystal Reports to complement the software. This

report writer package is easy to learn and only costs about $379.00.

Taking all costs into consideration, Company XYZ can purchase and implement

MRP II software for $75,000 or less.

Demonstration of Software

After the selection choice had been narrowed down to three or less, the consultant

submitted the list to the project group. It is their responsibility to create the formal request

for quotation. The recommendation of the researcher/consultant is to follow the steps

listed in Chapter II, sub-heading “Selecting the Finalist.” Another excellent

recommendation is to create a case study that emulates your company’s processes and

have the person doing the software demonstration show you all the steps involved in

49

completing the case study. During the survey, the Materials Manager at Lexel Imaging

was willing to give the consultant a copy of a case study that Lexel presented to its

potential software suppliers while going through their request for quotation process. This

is an example of the type of benefit that networking can result in.

The demonstration of software by the supplier should be in the control of the

client. Do not let it be a sales presentation, but a presentation of how the software will

help you achieve your objectives and goals with the least amount of effort and maximum

amount of efficiency. The presenters may suggest ways for you to re-engineer your

process. This should be viewed as a positive, not a negative. The software packages

presented in this paper have thousands of implementations in place, and the presenters of

the demonstration may share how other companies have benefited from changing their

processes. It is up to the customer however to decide on the re-engineering efforts that

will result.

Final Words of Advice

Any MRP II software’s capability to help the users run their business depends on

how well it is utilized, not on how it has been designed technically. A company should

not let their software dictate how their process flows. It should help them maximize their

efficiency and effectiveness involved in accomplishing their processes and procedures,

resulting in reduced total costs for the corporation.

References

Burt, D. N. & Pinkerton, R. L. (1996). A purchasing manager’s guide to strategicproactive procurement. (pp. 80-81) New York: AMACON.

Cavaye, A. L. M., Cragg, P., Igbaria, M., & Zinatelli, N. (1997, September).Personal computing acceptance factors in small firms – a structural equation model. MISQuarterly 21. 279-305.

Correll, J., & Goddard, W. (1994). MRP II in the year 2000 (On-line).http://www.ollie.com/MRPII2000.html.

Diamond, J. (1997). Production and inventory control. IIE Solutions, 29. (18-22).

Dozbaba, M. S. (1998). Corporate-wide software packages: Technology guide,Purchasing Today, 9, (Suppl. 1), 4-8.

Johnson, G., & Malucci, L. (1998, Feb). What software should I buy? APICS –The Performance Advantage, (On-line edition).http://207.87.14.34/magazine/feb98/dearapic.htm.

Kuiper, D. (Speaker). (1996). Choosing a new computer system, Vancouver, WA:Expert Buying Systems.

Management’s role in the selection process, (1994, September). APICS - ThePerformance Advantage (Suppl: buying smart). p. 6.

Meikle, G. (1997, July). New software supports the smaller manufacturer. NewZealand Manufacturer p.14.http://proguest.umi.com/pgweb?reqtype=301&userld=ipauto&passwd=ipaulo. AvailableFTP: Hostname: uwstout.edu Directory: ABI/Inform www/librarypage/indexes ISSN:11715375.

Navigating departmental issues (1998, September). APICS – The PerformanceAdvantage. (Suppl: buying smart) p. 8.

Needle, S. (1999). Selecting Software Successfully. p. 3. (On-line).http://www.ctsguides.com from: What’s New, Articles of Business.

Plossl, G. (1994). Orlicky’s material requirement’s planning (2nd Ed.) p. 60, NewYork: McGraw Hill.

RFP-why, what, and how much? (1997, May/June). Midrange ERP, (Suppl.)p. 18.

http://proguest.umi.com/pgweb?reqtype-301&userld=ipauto&passwd=ipaulo

http://www.csguides.com/

51

Ranking the vendors – looking at the whole picture. (1994, December) APICS –The Performance Advantage, (Suppl: buying smart) p. 19.

Selection committee – who are the members? (1994, September). APICS – ThePerformance Advantage, (Suppl: buying smart). pp. 10-11.

Software demonstrations-fact or fantasy? (1997, May/June). Midrange ERP,(Suppl) p. 21.

Software selection for small companies. (1999, February). ManufacturingSystems. (Suppl. 1), 11A.

Taylor, J. (1998, October). Small company, big challenge. ManufacturingSystems (On-line). http://www.manufacturingsystems.com/archives/1998/1098arc5.htm.

Wight, O.W. (1982). The executives guide to successful MRP II (2nd ed.) p. 39,40-42 Englewood Cliffs, NJ: Prentice Hall.

http://www/

Appendix A

NON APPLICATIONS ORDER PROCESS FLOW

53

Non Applications Order Process Flow

Sales Order isreceived

Is the orderfor an

existingproduct?

Stop -Follow

ApplicationsOrder

Process

No

Sales Prepares thePacket (See Work Ins)

Production Managerreleases for stock pull

per schedule

Exploded picklist isgiven to the stockroom

to pull.

Are allparts

available?

Parts are delivered tothe production floor

Inform purchasingof

parts shortage

Expedite parts

Parts are receivedand delivered to

production

No

Yes

Yes

54

Build the product

Is the billof

materialaccurate?

Ship the product

Give the packet tothe material

planner

Acquire theindividualrequisition

forms from thestockroom for the

sales order and linenumber

(I) First issue(U) Reverse issue unusedparts(L) Issue additions tobill of material andrequisition forms(R) Receive assembly frommanufacturing

Mark up andcorrect

bill of material

Yes

No

Run stockroom report onthe sales order and

line number for all materialissued to manufacturing

and file in the packet

Was the bill ofmaterialaccurate?

Bring packet toengineering for

corrections

Engineeringperforms

corrections

Packet contents arefiled

with the closed salesorder and/or line item

Finished

Yes

No

Appendix B

APPLICATIONS ORDER PROCESS FLOW

56

Sales prepares the packetSee work instruction

Create preliminarybill of material

No

Edit bill of material in MRP

Requisition parts from inventory

Submit a requisition to purchasingfor any additional parts required

Are allparts

available?

Expedite parts

Parts arereceived

and delivered toapplications

Applications Order Process Flow

Build the product

Yes

No

Engineering reviewsthe exploded bill of

material on MRP andengineering

documentation

Update MRP andprint bill of

material

Purchasing reviewsmaterial demands

Yes

Changes?

Yes

No

Engineeringreviews the customerrequest to determine

if the product has been built before

57

Requisitionparts

from inventory

Requisitionparts fromPurchasing

Are partsavailable?

Expediteparts

Parts arereceived anddelivered toapplications

Build the product

Ship the product

Ship the product

Give the packet to theMaterial Planner

Acquire the individualrequisition forms from thestock room for the salesorder and line number

(I) First issue(U) Reverse issue unusedparts(L) Issue additions to billof material and requisitionforms(R) Receive assembly frommanufacturing

Run stockroom report on thesales order and line number for

all material issued tomanufacturing and file in

sales order packet

Engineering updatesdocumentation

Packet contents are filedwith the closed sales order

and/or line item

Finished

No

Yes

Appendix C

SUPPLIER QUESTIONNAIRE

59

Questions for:

ROI Systems (Manage 2000)Made2ManageEffective Management Systems (EMS)Intuitive Manufacturing Systems (MRP 9000)Syspro Group (Impact/Encore)Lilly Software Associates (Visual)Fourth Shift

1. Is your ERP/MRPII software appropriate for a small electronics manufacturing business (20-50)employees, 2-10 million dollars in sales?

2. In days, what is the implementation time?

3. Do you include initial on-site training with installation? If so, please describe.

4. What on going training programs do you offer?

5. Do you hold a users conference?

6. What hours are your help lines manned? What is the annual cost for this service? What is yourresponse time policy?

7. Is there an 800 telephone line to your help line?

8. What type of system administration skills are needed to keep the system running?

9. For budgeting purposes, what % of the total sale should we expect for services (upgrades & help line)?

10. Do you have local representation and technical support for the Eau Claire WI area (60 miles from St.Paul-Minneapolis MN)?

11. Please supply a list of companies using your ERP/MRP II software in the Eau Claire WI and St. Paul-Minneapolis area. Please circle those that are small (2-10 million) and are manufacturing electronicsequipment.

12. Can you do the installation and test the software? If so, is there an additional cost?

13. Do you offer a payment plan for the procurement of this software package?

14. Can we lease the software with a buy-out clause?

15. We need to budget for this acquisition and implementation in the year 2000. Can you give us anapproximate dollar amount for budgeting?

Appendix D

SUPPLIER QUESTIONNAIRE RESPONSES

61

Question Company Response

Question #1Is your MRP software appropriate for a smallelectronics business 2-10 million in sales? Visual Yes

ROI YesEMS 2.5MM and higherMade2Manage YesImpact/Encore 5MM and higherFourth Shift Yes

Question #2How many days does it take to implement? Visual 90 days install - 90 days follow-up

ROI 35 daysEMS 40-180 daysMade2Manage 90-120 daysImpact/Encore 45 daysFourth Shift 14-70 days

Question #3Do you include initial on-site training withinstallation? Visual Yes

ROI YesEMS YesMade2Manage Yes

Impact/Encore YesFourth Shift Yes

Question #4What training programs do you offer?

Visual Classes are offered once per month atMinneapolis and Lilly in NewHampshire.

ROI There are generic classes for eachmodule, but we prefer to structure tothe clients needs.

EMS Classes are offered continuously andcan be taken at any time.

Made2Manage Module training in Minneapolis or atyour facility

Impact/Encore No regularly scheduled classes inMinnesota at the representatives. Youcan take classes on modules at Syspro.

Fourth Shift Classes can be customized or permodule either at Minneapolis or atyour facility.

Question #5Do you hold a "users" conference?

Visual Yes, an annual users group and also aMidwest users group conference.

62


ROI Yes, an annual international group anda local Minneapolis user group thatmeets bi-monthly.

EMS Yes, Annually - in different locations

Made2Manage Yes, a National Users Group and aMidwest Users group.

Impact/Encore Have only recently organized a usersgroup.

Fourth Shift Internationally - 2 times a yearRegionally - every 9 monthsMinneapolis and Chicago - every 9months.

Question #6What hours are your help lines manned? What is theannual cost? What is your response time policy?

Visual 8 a.m. to 8 p.m. Monday-Friday at acost of 15% of the software annually.There was no response to what theirresponse time was.

ROI same as above except ROI help linesare manned from 6:00 a.m. to 6:00p.m.

EMS Help lines are manned 7:00 a.m. to6:00 p.m. No response to other twoquestions.

Made2Manage Help line is manned from 8:00 a.m. to8:00 p.m. Annual cost depends onconcurrent users and we try to get backto you within 5-15 minutes

Impact/Encore Help line is available from 8:00 a.m. to5:00 p.m. The cost is $95.00 per hourand we try to answer all calls within 2hours.

Fourth Shift Help lines are manned 7:00 a.m. to7:00 p.m. You can reach technicalhelp from 7:00 p.m. to 11:00 p.m. andon weekends and holidays from 8:00a.m. to 5:00 p.m. The cost is 15% ofthe software cost annually. No answeron response time.

Question #7Is there an 800 number to the help line?

Visual No, but we call you back so cost islow.

ROI YesEMS YesMade2Manage YesImpact/Encore NoFourth Shift Yes

63


Question #8What type of administrative skills are needed to keepthe system maintained?

Visual Minimal, many small users havesomeone doing the systemsadministration part time.

ROI Most companies have a full-timeadministrator

EMS No responseMade2Manage NoneImpact/Encore Minimal, part time.Fourth Shift Minimal, part time.

Question #9For budgeting purposes, what % of the total salesshould we expect for service?

Visual 15% of the software investment,annually

ROI 15% of the software investment,annually

EMS 17% of the software investment,annually

Made2Manage 15 - 18% of the software investment,annually

Impact/Encore 12% of the software investment,annually

Fourth Shift Negotiable, but education andimplementation costs will be from .40- .75 of each $ spent for the software.This will be a one time charge.

Visual Yes, Minneapolis, St. Paul, MNQuestion #10Do you have local representation and technicalsupport close to Eau Claire, WI?

ROI Yes, our corporate headquarters is inSt. Louis Park, MN

EMS Yes, Burnsville, MN and Milwaukee,WI

Made2Manage Yes, BloomingtonImpact/Encore Representatives are located in St.

Cloud, MN.Fourth Shift Yes, our corporate headquarters is in

Bloomington, MN

Question #11Please supply a list of companies using yourERP/MRP II software in Eau Claire, WI. andMinneapolis, MN and circle the ones that are manufactures ranging from $2-10 million in sales.

Only ROI Systems was willing tosupply a list.

64


Question #12Can you do the install and test thesoftware? Is there a separateinstallation cost?

All companies install and test thesoftware.Implementation cost for all companiesare negotiable, but the rule of thumb is70% of the cost of the software.

Question #13Can you offer a payment plan for the procurement ofthis software package?

Visual Yes

ROI YesEMS YesMade2Manage YesImpact/Encore NoFourth Shift Yes

Question #14Can we lease the software with a buyout clause?

All companies will lease softwarethrough their company or help youarrange a lease through a local bank.

Question #15How much should we budget for the Visual $68,000software, installation and education? ROI $64,000

EMS $75,000-$85,000Made2Manage $60,965Impact/Encore $55,000Fourth Shift $75,000-$100,000

Appendix E

SOFTWARE DEMONSTRATION PUNCHLIST

66

PUNCHLIST

When receiving parts, can you key data into inspection (II) or reject (RMA) status?

Is there a screen that shows both supply and demand for each part number with acolumn that shows the “remaining on-hand total?”

Can you do “first issues” to work orders at every level of the bill of material?

Does the software have the ability to peg demands from a master schedule?

Can you backflush at various levels of the bill of material?

Can you program security by group?

By person?

How often does the software manufacture upgrade?

Can you classify parts as free stock, bin, or floor stock?

If yes, can you flag the system not to relieve these parts from stock when a picklistis issued or backflushed?

Is there a report that is incorporated in the software package to measure on-time deliveriesfrom suppliers?

Is there a report that is incorporated in the software package to measure % defectsper part number received from supplier?

Can you issue parts to general ledger accounts?

Is there a good quality module included that will track quality history on a part?

Is another software package necessary in order to do report building with ease?

Is there a cost for each custom report to be maintained when an upgrade occurs?

If yes, how much does it cost?

67

Can you create:

costed bill of material?

last actual purchase cost bill of material?

bill of materials using FIFO?

bill of materials using LIFO?

Can you generate a user-designated list of purchase requisitions?

Can you run a bill of material with a substitute part number?

Can you manually generate purchase order and work order numbers?

Can purchase order and work order numbers be alphanumeric?

Is your planning module able to plan:

lot for lot?

minimum/maximum?

EOQ?

Can you create different units of measure for purchasing and stocking?

Can the software do a multi-level where used?

Can the software compare several bills of materials and tell you only the differences?

Are there canned obsolete reports available with the software package?

Does the usage reporting tell you which demands were dependent and independent?

Appendix F

SOFTWARE DEMONSTRATION PUNCHLIST RESPONSES

69

PUNCHLIST RESPONSES ROI SYSTEMS MADE2MANAGE FOURTH SHIFT IMPACT/ENCORE VISUAL

When receiving parts, can you key data into inspection (II) orreject (RMA)?

Status?

YES YES YES YES YES

Is there a screen that shows both supply and demand for eachpart number?

With a column that shows the “remaining on-hand total?”

YES NO YES YES YES

Can you do “first issues” to work orders at every level of the billof material?

YES YES YES YES YES

Does the software have the ability to peg demands from amaster schedule?

YES YES YES YES YES

Can you backflush at various levels of the bill of material? YES YES YES YES YES

Can you program security by group?

By person?

YES

YES

YES YES

YES

YES

YES

YES

How often does the software manufacture upgrade? Approx once

every 18

months

Minor-every

six months,

Major-once a

year

Every 9 months Every 6 months Often, we view

it as improving the

product, could be 3

times per month.

70


Can you classify parts as free stock, bin, or floor stock?

If yes, can you flag the system not to relieve these parts fromstock when a picklist is issued or backflushed?

YES

YES

NO NO YES

YES

NO

Is there a report that is incorporated in the software package tomeasure on-time deliveries from suppliers?

YES WCB YES YES YES

Is there a report that is incorporated in the software packageto measure % defects per part number received from supplier?

YES YES YES YES NO

Can you issue parts to general ledger accounts? YES WCB YES YES YES

Is there a good quality module included that will track qualityhistory on a part?

YES WCB YES NO NO

Is another software package necessary in order to do reportbuilding with ease?

No, we have

a good

Report

Writer

NO We have 400

standard

Reports, but some

of our

Customers use

Crystal

Report Writer

No, we

recommend

Crystal

Reports

We use

Crystal

Reports

71


Is there a cost for each custom report to be maintained when anupgrade occurs?

If yes, how much does it cost?

Yes, about

$100,

depending on

complexity

Only on major

changes

Yes, around $200 Yes, billed

at $95.00 per

hour

Yes about

$100 per

custom

report

Can you create:

Costed bill of material?

Last Actual purchase cost bill of material?

Bill of materials using FIFO?

Bill of materials using LIFO?

YES

YES

YES

YES

YES

YES

NO

NO

YES

YES

YES

YES

YES

YES

YES

YES

YES

YES

YES

YES

Can you generate a user-designated list of purchase requisitions? YES WCB No NO NO

Can you run a bill of material with a substitute part number? NO NO No, we would

recommend

phantoming a

level.

NO NO

Can you manually generate purchase order and work ordernumbers?

YES NO YES YES YES

Can purchase order and work order numbers be alphanumeric? YES NO YES YES YES

72


Is your planning module able to plan:

Lot for lot?

Minimum/maximum?

EOQ?

YES

YES

YES

YES

NO

YES

YES

YES

YES

YES

YES

YES

YES

YES

Can you create different units of measure for purchasing andstocking?

YES YES YES YES YES

Can the software do a multi-level where used? YES YES YES YES YES

Can the software compare several bills of materials and tellonly the differences?

YES NO NO NO NO

Are there canned obsolete reports available with the softwarepackage?

YES YES NO NO YES

Does the usage reporting tell you which demands were dependentand independent?

YES NO NO NO NO

Appendix G

COMPANIES WHO PARTICIPATED IN

THE QUALITATIVE CHARACTERISTIC SURVEY

Lilly Software – Visual

Lexel Imaging1501 Newtown PikeLexington KY 40511

Nortech Imaging4050 Norris Court N.E.Bemidji MN 56601

Thern Corporation6712 Industrial Park RoadWinona MN 55987

Syspro – Impact/Encore

Seeyle Plastics9700 Newton Avenue SouthBloomington MN 55431

National Checking1381 Marshall AvenueSt. Paul MN 55104

Hansen Silo11587 County Road 8Lake Lillian MN 56253

ROI Systems – Manage 2000

Aetrium, Inc.2350 Helen StreetN. St. Paul MN 55112

Plasmon, Inc9625 West 76th StreetEden Prairie MN 55344

Hypro, Inc375 5th Avenue N.W.St. Paul MN 55112

Fourth Shift

Dotronix, Inc.160 First Street S.E.St. Paul MN 55112

Silent Knight5816 West 36th StreetMinneapolis MN 55416

Turck Corporation3000 Capis DrivePlymouth MN 55441

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